4.  The applicant company was the registered owner of 4,462 square metres of immovable property located in the seaside area of Limassol, on which a complex of stores had been used as bonded warehouses since 1965.
5.  On 10 July 1972 the municipality of Limassol decided to acquire the applicant company’s seaside properties for public benefit purposes which included “town planning” and “construction, maintenance and development of land communications” in furtherance of a municipal plan to rid the Limassol seafront of privately owned buildings. On 1 December 1972 a notice of acquisition of the relevant property was published in the Official Gazette of the Republic. The notice referred to the applicant’s property, which constituted part of the relevant Land Registry plan, and having total area approximately 4,462 square meters. On 26 January 1973, an order for compulsory acquisition was published in the Official Gazette.
6.  On 14 February 1973 the applicant company lodged judicial review proceedings with the Supreme Court (case no. 47/73) to contest the order. On 31 May 1975 judgment was delivered by the Supreme Court dismissing the applicant company’s application. The land in question was one of the few remaining plots for the completion of a project that had been implemented in stages for more than two decades. From the evidence adduced it was clear that the financial implications of the project had been carefully considered by the municipality having due regard to whether it was the opportune moment to proceed with the acquisition.
7.  On 5 May 1977 the municipality requested the Lands and Surveys Office (LSO) to provide an evaluation of the property so as to determine the amount of compensation to be paid to the applicant company. On 7 September 1978, the LSO concluded that the value of the property amounted to 100,000 Cypriot pounds (CYP). On 3 September 1980 the municipality informed the applicant company that they would pay CYP 70,000 as compensation. It added that given that the applicant company’s own evaluation was excessive, a friendly settlement could not be concluded.
8.  On 1 March 1984 a meeting was held between the applicant’s representatives and the municipality. The latter disclosed the estimated value of the property and offered CYP 190,000, including interest, as compensation.
9.  On 23 February 1985 the applicant company requested the municipality to make a new offer of compensation within seven days. It notified the municipality that in the event that no such offer was made, it would consider that there was no longer an interest in the compulsory acquisition, which would be taken as abandoned.
10.  The municipality offered to pay the applicant company by 28 February 1985 the amount of CYP 200,000, which included compensation as assessed by the LSO and interest. This was not accepted by the applicant company which made a counter-offer of CYP 250,000 including interest. The municipality agreed to the amount of CYP 230,000, an offer which was, however, not approved by the Government.
11.  On 8 May 1985 the applicant company filed application for judicial review no. 517/85 with the Supreme Court, requesting a declaration that the omission of the municipality to revoke the acquisition order of 1973 was contrary to section 7 of Compulsory Acquisition of Property Law no. 15 of 1962 and/or section 8 of Compulsory Acquisition of Property (Amendment) Law no. 35 of 1983, and Article 23 of the Constitution. Moreover, a declaration was requested that the acquisition order was null and void as a result of the non-compliance by the respondents with the requirements under the aforementioned legislation to offer compensation.
12.  On 28 November 1987 the Supreme Court delivered its judgment, dismissing the application. An omission of the municipality did not lead to the nullification of the acquisition: the requirement for prompt payment of compensation aimed only at safeguarding the financial interests of the owner and any omission in this respect had only financial consequences on the municipality. The financial interests of the applicant company were safeguarded by the provision for payment of interest and the possibility of applying to the courts for assessment of the amount of compensation. Moreover, the owner of property subject to acquisition had no right to demand the revocation of an acquisition order on the ground that the property was not required for the purpose of the acquisition or that the purpose for which it was to be acquired had become unattainable, or for failure of the municipality to offer compensation.
13.  On 10 November 1972 the applicant company submitted to the municipality an application for a building permit concerning the relevant property for the construction of three blocks of flats consisting of 32 shops and 13 three-bedroom and 32 two-bedroom flats. The application for a building permit was refused due to the decision for the compulsory acquisition of the property (see paragraph 5 above).
14.  On 5 January 1973 the applicant company brought an application before the Supreme Court of Cyprus contesting this refusal (case no. 11/73), which was joined with case no. 47/73 (see paragraph 6 above). On 31 May 1975 it was held that the refusal was contrary to law and null and void, as a building permit could not be refused given that the applicant company remained the owner of the property and would only cease to be the owner upon payment of compensation for the property under acquisition.
15.  Approximately fifteen years later, on 30 December 1988 the applicant company applied again for a building permit. On 30 March 1989 the applicant company lodged application for judicial review no. 229/89 contesting the municipality’s failure to reply. On 3 February 1990 the municipality refused the building permit application emphasising that the acquisition order was still valid. Given the municipality’s reply the applicant company withdrew its application for review.
16.  On 10 February 1990 the applicant company lodged new judicial review proceedings contesting the refusal and maintaining that Law no. 84 of 1988 amending the Compulsory Acquisition Law of 1962 rendered the acquisition order void. On 18 February 1993 the Supreme Court found the amending law by virtue of which acquisition orders could be annulled as contravening the principle of separation of powers and, as such, unconstitutional. Hence, the acquisition order was found to be valid and the application was dismissed.
17.  On 4 January 1994 the applicant company filed an application with the District Court of Limassol requesting payment of compensation for its property under compulsory acquisition.
18.  On 25 November 1994 a requisition order was published in the Official Gazette pursuant to section 4 of Requisition of Property Law 21/62 as amended. The order concerned the requisition of the entire property covering an area of approximately 4,447 square meters for a period of two years.
19.  On 29 December 1994 the municipality made an offer for compensation to the applicant company, in accordance with section 8 (2) of Law no. 15 of 1962 as amended by Law no. 35 of 1983, amounting to CYP 100,000 plus statutory interest. The applicant company accepted the offer, without prejudice (in accordance with section 8 of Law 25 of 1983, see paragraph 31 below), and withdrew its application pending before the district court for payment of compensation.
20.  On 16 January 1995 the applicant accepted payment of the amount of CYP 277,994.51 and ownership of the property was transferred to the municipality. The amount paid corresponded to CYP 100,000 for the value of the plot, plus CYP 177,994.51 annual interest at the rate of seven per cent from 1 December 1972 until 27 May 1983, then at a rate of nine per cent until the date of payment.
21.  On 15 February 1995 the applicant company lodged proceedings with the District Court of Limassol concerning the determination of the amount of fair and reasonable compensation for the compulsory acquisition of its property (see paragraph 30 below). According to its expert evidence the value of its property at the time of notification of the acquisition amounted to CYP 336,368. The parties agreed that the market value of the property in 1994 was CYP 2,150,000. The applicant company’s main argument in the proceedings was that compensation should be based on the value of the property in 1994. Following approximately twenty appearances before the court, the hearing commenced on 27 March 2000. It appears that there had been sixteen adjournments of the case at least one of which was requested by the applicant company. The hearing was completed after at least seven sessions and judgment was reserved on 12 April 2001 and was delivered on 11 March 2002.
22.  The court found that the municipality had made at some unspecified time before 1980 an offer of CYP 70,000 as compensation and then on 1 March 1984 a new offer of CYP 190,000 including interest, both of which had been rejected by the applicant company. Given the previous offers, the court could not agree with the applicant company that the amount of compensation should be based on the value of the property in 1994, when the municipality’s offer was made. Under section 10 (a) of Compulsory Acquisition Law no. 15 of 1962, the time relevant for determination of the amount of compensation was that of notification of the order of acquisition. The applicant company’s argument that a fair amount had to be based on the market value of the property in 1994 was not justified by law. Turning to whether the actual compensation paid on the basis of the value of the applicant company’s property in 1972 was equitable, the court noted that it could not accept the applicant company’s expert evidence, which had been based on an inappropriate comparison with properties having different building density coefficients from the applicant company’s property and other important differences in their legal and factual characteristics. Having thoroughly examined the suggestions of the applicant company’s expert witness concerning his evaluation, the court dismissed his evidence, finding that he had merely tried to serve the financial interests of the applicant company and not to assist the court. The expert evidence submitted on behalf of the municipality had been accurate, used comparators that had similar legal, physical and real characteristics to those of the applicant company’s property and had accurate adjustments of the value of the property based on adequate and well-substantiated explanations. The court accepted therefore that, on the basis of the evaluation, the value of the applicant company’s property on 1 December 1972 was CYP 103,056. The court awarded the latter sum (minus the amount of CYP 100,000 already paid by the municipality) plus different taxes and other expenses paid by the applicant company.
23.  On 17 April 2002 the applicant company filed an appeal with the Supreme Court contesting the district court’s judgment. It maintained that the LSO had estimated the value of its property in January 1980 as CYP 735,000 which, by simple deduction, suggested that the value of the property in 1972 was approximately CYP 350,000, as confirmed by its expert evidence. Further, it maintained that the municipality’s obligation to provide it with just compensation as required by Article 23 (3) of the Constitution and the relevant jurisprudence of this Court could not be considered to have been fulfilled by an offer of compensation made 22 years after the acquisition notification and estimated on the basis of the value of the property at the time of the notification.
24.  The appeal was heard on 18 February 2004 and on 19 March 2004 it was dismissed. The court noted that the fact that the value of the property had been estimated by the LSO to be CYP 735,000 was a non sequitur, as both expert witnesses appearing before the district court had used the comparative method of valuation to determine the property’s value at the relevant time and any subsequent evaluation was based on different grounds and could not confirm or disprove an outcome reached by using the comparative method in respect of a particular point in time, which was acceptable per se and could not be falsified by a subsequent estimation based on different grounds. Further, the court found the applicant company’s argument under Article 23 of the Constitution to be misconceived: firstly, the municipality had made offers for compensation on at least two occasions before 1994, and any delay in payment of compensation was attributable to the applicant company, which had chosen repeatedly to contest the lawfulness of the acquisition procedure instead of referring the matter of compensation to the district court for determination. The applicant company knew at all times that the value of the property, as at 1972, had been estimated as CYP 100,000 and that its own evaluation was substantially higher. It was further aware that the relevant law provided that compensation must be based on the market value of the property at the time of notification of the compulsory acquisition. The applicant company should therefore have applied to the courts to obtain determination of the amount of compensation, as provided by law, or could have challenged the municipality’s offer of 1 March 1984 before the courts. Instead, it only contested the same old valuation in 1995 when it challenged the new offer which was made on its basis.
25.  Lastly, it added that section 10 (a) of the Compulsory Acquisition Law (see paragraph 30 below) providing that the relevant date for determination of the amount of compensation should be that of notification of the acquisition did not contravene Article 23 of the Constitution or Article 1 of Protocol No. 1 to the Convention. The latter provision explicitly accepted the regulation of acquisition proceedings by the conditions provided for in domestic law. It was added that:
“The relevant case-law of the Court was referred to, not to dispute the time relevant for determination of compensation, a point which was clearly determined by the law, but rather to emphasise that, given that the delay in payment was attributed to the applicant company for not using the proceedings available to have it determined, and while the municipality had consistently offered to provide compensation on the basis of the value at the time of notification of the acquisition, the core of the applicant company’s claim had vanished.”
26.  On 2 October 2006 the Government paid the applicant company in accordance with the district court’s judgment CYP 3,056 plus interest amounting to CYP 8,670.25 (calculated on the basis of the statutory rate of seven per cent from 1 December 1972 until 26 May 1983 and then nine per cent from 28 May 1983 until 2 October 2006).